AFTER an encouraging start to the year, when the number of properties sold in Cyprus increased for the first time in nineteen months, sales tumbled in February.
It appears that the earlier surge in sales may be attributed to people waiting to deposit their contracts of sale until after the recent tax reductions had been introduced.
According to the monthly statistics published by the Department of Lands and Surveys, a total of 445 contracts for the sale of property were deposited at Land Registries across the Island in February compared with the 602 deposited during February 2011; a fall of 26.1%.
Of those 445 contracts, 329 (82%) were in favour of Cypriot buyers and 116 (18%) were in favour of overseas buyers.
Domestic sales
With the number of registered unemployed having reached a record level of 37,874 in February, a lack of liquidity in the banking system, tightened borrowing criteria and a general uncertainty about the future of the economy, domestic sales tumbled; down 28.6% across the Island standing at 329 compared with 461 in February 2011.
The worst hit area was Larnaca, where sales plummeted by 78.1% compared with last year. Larnaca was followed by Paphos (-37.7%), Nicosia (-18.9%), Limassol (-14.8%) and finally Famagusta (-6.7%).
Overseas sales
Foreign demand for property continued to decline in February, increasing pessimism about the future of the Island’s once booming overseas property market.
Economic conditions in Cyprus’ main markets has yet to improve and problems resulting from the unacceptable delays in issuing Title Deeds have yet to be fully resolved by the Island’s government.
The ongoing actions of nefarious elements in the construction industry and the legal profession and have yet to be addressed (with the Cyprus Bar Association Disciplinary Committee imposing paltry fines for serious breaches of professional conduct).
During February, overseas sales fell to 116 compared with 141 in February 2011; a drop of 17.7%.
Sales in Paphos fell by 39.2%, while those in Limassol and Nicosia fell by 10.7% and 6.7% respectively. Foreign sales in Famagusta (10) and Larnaca (22) were the same as February 2011.
In 2011, foreign demand for property hit a 10-year low.
@George – interesting comment! Perhaps there is some method after all in Tof’s madness in forwarding Russian armaments on to Syria (“via Turkey”)….
I heard the boys in a London Greek (a deviloper amongst them visiting his cousin) Cypriot kafenio talking about Syria turning into a Middle eastern regional war and if it happens all the rich Arabs will come to Cyprus buy property and the prices will double in a year.
The deviloper said in Greek something like “with Gods will”
Nigel is right. As long as there are individuals prepared to pay with their wallets rather than their brains then no one can blame anyone for inflating prices to what people will pay.
Cypriots know they are not worth it and they would never dream of paying what some foreigners do but where there is lunacy there is money.
Looks like the damp concrete box industry is in big trouble.
I really feel for them, I do!
@John Swift – Property prices are dictated by what people are prepared to pay for them.
If prices are too high, properties will not sell – it’s a simple as that.
(I have no doubt that some people will be taken in by promises of prices rocketing and being able to sell at twice the price they paid for the property before it’s completed).
I can understand that from a business point of view people get what they can but the situation in Cyprus has got into the ridiculous situation where Cyprus property is now more expensive than UK property whereas a few short years ago it was the reverse.
Our UK property has fallen to £170k 202k Euros.
Seven years ago we could sell up in the UK and have a considerable sum left over after buying in Cyprus. That is what ex-pats expected and got but now you’d need to take out a mortgage to pay the balance of a Cypriot property.
Cypriots and ex-pats must do away with this over optimism regarding Cyprus property prices.